Oil Trades Below $67 as Dollar Rises, Crude Stockpiles Increase

Sept. 30 (Bloomberg) -- Oil traded little changed below $67 a barrel in New York as the dollar rose and an industry-funded report showed an increase in crude supplies in the U.S., the world’s biggest energy consumer.

Oil declined yesterday as a stronger dollar reduced the appeal of commodities as an alternative investment. The American Petroleum Institute reported crude inventories rose 2.76 million barrels last week. A U.S. government report today may also show stockpiles increased.

“The dollar is having an affect,” said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne. “The fundamental data is quite volatile and people are quite uncertain.”

Crude oil for November delivery traded at $66.64 a barrel, down 7 cents, in electronic trading on the New York Mercantile Exchange at 10:22 a.m. Sydney time. Yesterday, the contract fell 13 cents to settle at $66.71. Oil is poised for a 4.7 percent decline for the three months ending today, the first quarterly drop in three periods.

The Standard & Poor’s 500 Index fell 0.2 percent yesterday in New York, and the Dow Jones Industrial Average lost 0.5 percent. Australia’s S&P/ASX 200 Index advanced 0.2 percent at 10:48 a.m. local time, and Japan’s Nikkei 225 Stock Average climbed 0.3 percent.

The dollar traded at $1.4590 per euro at 9:58 a.m. Sydney time, from $1.4587 yesterday, when it touched $1.4527, the strongest level since Sept. 14.

Rising Supplies

“Part of the reason earlier in the week that oil didn’t fall on the stronger dollar was that it seemed to have fallen to those resistance levels around the $65-a-barrel mark,” Westmore said. “Now that oil is up to the high $60s the dollar is probably having a bit of an effect.”

An Energy Department report scheduled for release today will probably show crude stockpiles rose by 2 million barrels last week, according to the median estimate of 17 analysts surveyed by Bloomberg News. Gasoline and distillate fuel inventories also increased, the survey showed.

Crude inventories rose to 340 million barrels last week, according to the API report. Gasoline supplies decreased 1.72 million barrels to 212.5 million, the report showed.

Also weakening prices, confidence among U.S. consumers unexpectedly fell in September as a rising unemployment rate weighed on households, the New York-based Conference Board said yesterday. The group’s confidence measures of present conditions and its expectations for six months from now declined.

“U.S. confidence came out last night and was a little bit softer than expected and that weighed on the price,” Westmore said. “I think it’s probably going to range around the $70 a barrel mark,” in the short term, he said.

Brent crude oil for November settlement rose 0.2 percent to $65.65 on the London-based ICE Futures Europe exchange at 10:42 a.m. Sydney time. It dropped 5 cents to $65.49 a barrel yesterday.